First assembled in 1896, the Dow Jones Industrial Average is a stock market index that tracks the performance of 30 “blue chip” companies across a range of industries on U.S. exchanges. It is not weighted by market cap or arithmetic mean, though it is price weighted and does offer a broad snapshot of the performance of U.S. stocks at any given moment. The SPDR Dow Jones Industrial Average ETF Trust (DIA) is designed to follow the performance of this index.

DIA holds 30 companies across nine sectors, including Industrials (making up 20.35% of the portfolio), Information Technology (19.69%), Financials (14.91%), Consumer Discretionary (13.62%), Health Care (11.76%), Consumer Staples (8.89%), Communication Services (4.80%), Energy (4.77%) and Materials (1.20%). Its top 10 holdings are Boeing (9.58%), Home Depot (5.84%), Apple (5.64%), UnitedHealth (5.47%), McDonald’s (5.40%), Goldman Sachs (5.22%), Visa (4.33%), 3M (4.14%), Travelers (3.74%) and IBM (3.66%).

DIA’s gross expense ratio is 0.17% and it currently has about $275 billion in assets under management.

Rationale

The most direct way to gain exposure to the holdings in DIA is to buy its listed shares. But there are a number of good reasons for investors to reconsider that approach. Unlike total market ETFs, DIA is weighted to mirror the Dow Jones Industrial Average, rather than broader weighted indexes like the S&P 500. This potentially ties investment outcomes to the Dow’s weightings, limiting returns from a broader index. Rather than buying DIA shares themselves, investors interested in gaining exposure to the Dow components might consider buying funds that provide exposure to its top-weighted sectors, including Industrials, Information Technology and Financials. After all, the return drivers that will benefit DIA might also benefit other funds that are even more diversified.

Investing in DIA

A search on Magnifi suggests that investors can gain access to the Dow Jones Industrial Average via a number of different funds and other ETFs, including those shown below.

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